Microsoft Insider Reveals Truth Behind Bethesda Closings
Many were baffled when Microsoft shut down some Bethesda studios and combined others, which will result in plenty of layoffs. Now, someone with knowledge of the situation is letting people know what really happened. Brian Hilderbrand, the senior public relations manager at Microsoft, wrote a detailed post explaining the situation, and he points the finger squarely at Game Pass (a subscription service that allows subscribers to play games without buying them) and Xbox’s acquisition of Activision. Essentially, Game Pass cost Xbox a lot of money on their games because people subscribed to the service and played games that way instead of buying them, saving themselves a lot of money and costing Xbox and Microsoft a bundle. Meanwhile, Xbox spent over $70 billion acquiring Activision and Bethesda – $68.7 billion for the former, $7.5 billion for the latter – which it then had to recoup for Microsoft, and which it hasn’t, in large part because of the revenue lost through Game Pass. Now, Xbox has to make cuts to stop the bleeding. You can read the whole post below, courtesy of Grummz, aka Mark Kern:
Vindicated once again.
When Microsoft acquired Blizzard, I explained how Game Pass is not sustainable and bad for developers.
I was endlessly attacked for this and told it was "great."
I was right then, and now here we are with Microsoft not able to sustain the studios they… pic.twitter.com/dZS5GPEUF2
— Grummz (@Grummz) May 9, 2024
Now, it’s fortuitous that Grummz shared this. As a series of reposts reveal, he’s been saying for some time that Game Pass would be a problem for Microsoft and Xbox in the long run for this exact reason and would be even worse for gamers, who would get hit with “in-game purchases” and the like to offset the lost revenue.
Gamepass is great for Microsoft and horrible for individual games.
You know how games have to make money if they are so cheap on Gamepass?
In game purchases and predatory monetization.
The goal is to get you in cheap, then monetize you like a casino. y’all cheering this.
— Grummz (@Grummz) June 29, 2023
This is about conglomeration of content to single dominant sources.
It is wealth/profit transfer from individual developers to favoring a central publishing pipeline which eventually own the lions share of profit.
To build this pipeline, Microsoft has to pay for titles to be on…
— Grummz (@Grummz) June 29, 2023
Amusingly, Grummz was called out by a games journalist, Garret Atkins, the editor-in-chief of VGT: Video Games Tracker, who claimed the former Blizzard producer was either lying or didn’t know enough about the subject. Yep, a games journalist told someone who worked extensively in the video game industry that he knew more about the video game business than the professional did. To the astonishment of exactly zero people, Atkins’ comment appears to have been deleted, but Grummz has a screenshot:
Remember when this game "journalist" for @VGTGamingNews tried to tell me I knew nothing or lied when I said Gamepass was going to be bad for developers?
Didn't go so well for him. pic.twitter.com/FUKHKKcbD2
— Grummz (@Grummz) May 9, 2024
The similarities to Disney are hard to ignore; the two companies went on, as Hilderbrand puts it, “a buying spree” and found themselves (albeit for different reasons) unable to make back the cost of their acquisitions. Now, in Xbox’s case, a lot of people are going to lose their jobs because games that may otherwise have been successful tanked. Since someone working for Microsoft is saying this publicly – and it’s the head of PR, so I don’t think he’d be saying this if Microsoft didn’t want it out there – I wonder if they’re laying the groundwork for getting rid of or significantly altering Game Pass. If it’s costing them this much money, it may be inevitable.
